China's Macroeconomic Outlook: Quarterly Forecast and Analysis Report, August 2013

65 Pages·2014·1.669 MB·English

by  Center for Macroeconomic Research of Xiamen University (auth.)

Current Chinese Economic Report Series
Center for Macroeconomic Research of
Xiamen University
China’s
Macroeconomic
Outlook
Quarterly Forecast and Analysis Report,
August 2013
Current Chinese Economic Report Series
For further volumes:
http://www.springer.com/series/11028

Center for Macroeconomic Research
of Xiamen University
China’s Macroeconomic
Outlook
Quarterly Forecast and Analysis Report,
August 2013
Center for Macroeconomic Research of Xiamen University
Center for Macroeconomic Research
Xiamen University
Xiamen, Fujian , China
ISSN 2194-7937 ISSN 2194-7945 (electronic)
ISBN 978-3-642-54220-6 ISBN 978-3-642-54221-3 (eBook)
DOI 10.1007/978-3-642-54221-3
Springer Heidelberg New York Dordrecht London
Library of Congress Control Number: 2014903495
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Pref ace
T his report is a partial result of the “China Quarterly Macroeconomic Model
(CQMM)”, a project of the Center for Macroeconomic Research (CMR) in Xiamen
University. The CMR is one of the Key Research Institutes of Humanities and
Social Sciences of the Ministry of Education of China. The research is funded by
the National Social Science Foundation of China (13&ZD029), the Key Research
Institutes of Humanities and Social Sciences of the Ministry of Education of China
(13JJD790025, 13JJD790026), and the Youth Project of National Social Science
Foundation of China (13CJL017).
Since the launch of CQMM 7 years ago, 14 forecast reports with policy simula-
tions and 7 essay collection books on China’s macroeconomic analysis have been
published. This is the 15th forecast report, which is a summary of forecast results
released at the “China Macroeconomic Advanced Forum (Fall, 2013), CQMM
Press Conference for Economic Projections for 2013–2014”. The forum was jointly
organized by the Center for Macroeconomic Research, Xiamen University, and the
Economic Information Daily, Xinhua News Agency, in Beijing on August 18, 2013.
Since the Fall of 2012, Springer began to publish the English version of these
forecast and analysis report series entitled C hina’s Macroeconomic Outlook
twice a year.
W e are grateful to all the participants for their valuable comments at the press
conference. We revised the report based on their comments. We also appreciate sup-
port from Economic Information Daily, Xinhua News Agency. We thank the media
for reporting the conference. Of course, we are fully responsible for all possible
mistakes in this report.
Xiamen, Fujian Center for Macroeconomic Research
China of Xiamen University
v

Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 A Review of China’s Economy in the First Half of 2013 . . . . . . . . . . . . . 7
2.1 Economic Growth Slowed Down, Structural
Imbalance Persisted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Manufacturing Investment Growth Fell Sharply,
Transportation Investment Grew Fast . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 The Growth of Imports and Exports Was Weak,
the Trade Surplus Continued to Expand . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 The Growth Rate of Real Income Declined,
the Growth of Domestic Consumption Slowed Down . . . . . . . . . . . . . 11
2.5 CPI Changed Smoothly, PPI Continued to Fall . . . . . . . . . . . . . . . . . . 12
2.6 The Monetary Policy Was Tightening Gradually
and the Fiscal Policy Was Fine-Tuning Actively . . . . . . . . . . . . . . . . . 13
3 Forecast of China’s Economy During 2013–2014 . . . . . . . . . . . . . . . . . . 17
3.1 Improvements of CQMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1.1 Introducing Production Function and Measuring
the Output Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1.2 Improvement of the Fiscal Module . . . . . . . . . . . . . . . . . . . . . 18
3.2 Assumptions of Exogenous Variables . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2.1 Economic Growth Rates in the Euro Zone and the U.S. . . . . . 18
3.2.2 Major Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2.3 The Growth Rate of Broad Money Supply (M2) . . . . . . . . . . . 20
3.3 Forecasts of China’s Major Macroeconomic Indicators
for 2013–2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.3.1 Forecast of GDP Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.3.2 Forecasts of Major Price Indices . . . . . . . . . . . . . . . . . . . . . . . 21
3.3.3 Forecasts of the Growth Rates of Other
Major Macroeconomic Indicators . . . . . . . . . . . . . . . . . . . . . . 22
3.3.4 Forecast of the Growth Rate of Government Revenue . . . . . . 26
vii
viii Contents
4 Policy Simulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.1 The Policy Simulation Designs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2 The Policy Simulation Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2.1 The First Scenario: All the Reduced Non-tax
Revenue Would Be Transferred to Enterprises
to Increase Their Profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2.2 The Second Scenario: All the Reduced Part
of Government Non-tax Revenue Would be
Transferred to Employees
to Increase Their Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5 Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.1 Policy Implications and Suggestions . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Appendix 1: Comments and Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Appendix 2: A Survey on China’s Macroeconomic
Performance in 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Contributors
Principal Investigator
Wenpu Li Center for Macroeconomic Research of Xiamen University,
Xiamen, China
Team Members
Wang Yanwu, Gong Min, Liu Yu, Yu Changlin, Li Jing, Chen Guifu, Lin Zhiyuan,
Lu Shengrong, Cui Qingwei, Xiong Ying, Wu Huakun, Huang Yanping, Luo Wei,
Cao Cuirong, Li Hao, Xu Xinxin, Chen Tingting, Gao Hongjian
ix